The Alternative to Assuming 'Rational' Use of Financial Information within Small Firms

Brian Gibson
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Brian Gibson: University of Newcastle

Journal of Entrepreneurial Finance, 1993, vol. 2, issue 2, 163-174

Abstract: Since emerging as a separate domain, research concerned with financial management in small firms has proceeded on a foundation of assumptions, primarily influenced by economics, which do not appear to be in accord with reality. Two fundamental assumptions are reviewed in this paper and the validity of each is questioned. These are that the small firm owner/manager is a rational economic decision maker and must have access to financial information to properly engage in decision making activities. Alternative interpretations, associated with the purposive action assumptions of the Austrian school of economic thought, are proposed as a more appropriate foundation for the development of theories of small firm financial management.

Keywords: Rational; Small Firm; Financial Information (search for similar items in EconPapers)
JEL-codes: B53 G32 L25 (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (1)

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